For the 1000th time: Economic theory is just that. It is theory. As my macroeconomics professor once intoned, economists usually conceive people as little economic beings, maximizing their utility and doing little else. “Reality,” as another prof said, is a “special case.”
Globalization was a terrific theory. If it’s cheaper to manufacture in China, for example, with its starvation level wages, they should produce the widgets, ship them to wealthy countries, and the investor rakes in profits. The whole thing works brilliantly as long as (a) energy remains inexpensive and (b) we all get along. Once either (or both) of those factors are untrue, the whole system falls apart.
Gasoline’s price has retreated from its $5.016/gallon average high in June ( https://gasprices.aaa.com/ ), but there is no denying the psychological exclamation point that high created in the minds of importers, exporters, and manufacturers. In terms of world conflict, a major European war show no signs of ending soon, China is rehearsing the invasion of Taiwan it’s been threatening since 1949, the Baltic countries are arming in preparation for further Soviet (I mean Russian) adventures, and the U.S. is continuing its involvement in practically everybody’s affairs. This world has never exactly been a Montessori kindergarten, but it’s the worst I’ve seen it since the the Cold War.
With high energy prices and conflict galore, it appears that the oligarchs are picking up on reality: globalization was a pleasant practice for the elite wealthy, but it was never going to last. I’m pleased to note in the news today that the U.S. will soon be manufacturing the batteries for EVs.(https://www.barrons.com/articles/ev-batteries-america-51661540193 ) I hope this is a continuing trend. I look forward to America having functioning factories once again.
Bittersweet Abattoir 